Why Free Content Isn't a Sustainable Business

I think your article is accurate. It is expensive for a newspaper to maintain comprehensive and accurate reporting, keeping the world up-to-date. However, there are other media sources that are doing the same thing at a faster rate. CNN for example, advertises itself as "up to the minute news", taking advantage of every possible medium to make sure that it has the latest stories. The internet has excelled in two areas: immediacy and editorializing. The internet spreads news fast: the problem is that it isn't necessarily fact-checked. It makes up for the fact-checking though by being so widespread that reporting can be done by incidental people; people that are jsut in the right place at the right time. Editorializing is also a major fact of the internet. People look to others that have opinions that they share or would never mention. It's nearly impossible to read an article without bias on the web or on a blog; however, if it coincides with the reader's worldview, then it's readily accepted. I don't know if periodicals understand their true value in the marketplace. A number of periodicals have tried emulating the strengths of the internet, a wholly different medium. I feel as though periodicals should stick to what they are good at: timely, accurate reporting; in-depth stories that are impossible to get from the incidental reporter; comprehensive articles that are not readily available in a world populated by Twitter and Facebook (sites that rely upon one-line updates)...and the backlist of articles and information that those publishers have built up over decades, as well as the reputations that those periodicals have earned. The internet lacks accountability; information today is gone tomorrow, wiped off of servers. It probably explains why there IS so much editorializing and "off-the-cuff" writing. Periodicals stand the test of time and are marked in history in black ink. Articles are thoughtful, more considered and measured. It isn't a knee-jerk reaction, but a well-thought out response. Anyways...that's my two cents.

"Consequently, journalism itself is endangered. Because even if journalists themselves are generally underpaid, running a news business committed to quality coverage, to comprehensive work, to investigation and to a skeptical, disinterested product is expensive." -- Journalism isn't endangered - business models that hinge on the scarcity of journalistic output are. Let's face it - it has never been cheaper, easier, or more fun to create journalism - that's why those scarcity models are dying. -- Also, you need to let go of this imaginary "web visionary" cabal that says information needs to be free - or should be free. That line is a perversion of Steward Brand's quote ("On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.") It's that last part of the quote you should concern yourself with - the part about the cost of getting it out getting lower and lower - that's what's killing your business model. It cost next to nothing to publish in the modern world and we in the magazine and professional media class continue to slave away under the old rules. We need to wake up folks - the inmates are running the asylum - and the relentless creative tension that creates is ultimately a good thing - good for journalism, good for democracy, and - if you learn to accept the reality of the new paradigm - good for business. -- To you point about parasitic web sites - some of that exists - just as it has in traditional media. It's par for the course and always has been. However, your implied sentiment that ALL web-sourced journalism is somehow parasitic is just plain ridiculous. One only need look to the tech sector to see that web based, cost effective, quality journalism is alive and well. So much so that even the New York Times is syndicating the work of pure web outfits like ReadWriteWeb and Venture Beat. That's the same New York Times that ran dozens of wrong-headed Judith Miller pieces in the run up to perhaps this nations biggest mistake in decades. -- So cheer up Tony. The only companies that are going to die will be the ones who have earned it.

I think the scary thing is news organizations are not going to be able to afford long term investigative efforts like those that help bring down McCarthyism, break Watergate and ultimately wear down support for the war in Vietnam. Too much emphasis will be placed on often times shallow breaking news. And maybe this is as much fault of the medium since readers like that quick news fix and then move on to their facebook feed. We seem to be digesting smaller and smaller bits of information and therefor our understanding of the world around us becomes limited to 140 character fragments.

I think some of the arguments in the article and comments are logical but based upon invalid assumptions. First, the "need" for some form of payment for online content because publishers will need it to survive is backwards thinking. The market will pay what the market will pay and cares little for the needs of the service or goods provider. It is clear that most people will not pay for online content. Publishers have two choices - learn to operate more efficiently on a lower cost basis or create content that is so fantastic that people can't do without it (and they have voted with their credit cards that today's content is not, for the most part, that good). Of course the industry does not want to accept this. Writers will have to write more, editors will have to edit more - all for the same compensation. Companies will have the learn to be more efficient (maybe, just maybe we don't need 10 news crews outside Bernard Madoff's building 24/7 in order to give the public the "news." Maybe the NY Times didn't need to build a brand new expensive HQ, maybe a magazine could operate someplace other than oversized, overpriced top drawer Manhattan offices. These arguments always seem to focus on the need for revenue to support "high quality" news which is so vital. There is typically great disdain for the "lack of fact checking" and "unprofessionalism" of many Internet information outlets. Yet the mainstream media has long lost that trust from the public. It is not just the classic liberal-conservative political argument but many other things as well. Sensationalism often trumps newsworthiness in virtually all outlets. Did the OJ Simpson trial and similar cases receive the amount of coverage commensurate with their importance to the world and nation at large? Or was it an example of major news providers acting like tabloids? For every Watergate exposure there is a shameful incident like Dan Rather's career ender. Regardless of political leanings one must be struck by the utter lack of fact checking that went on there - and interested that the unprofessional Internet bloggers were able to identify the documents in question as bogus though the fact checkers as CBS apparently were not. If publishers want to survive they will adapt to the world, not expect the world to adapt to them. Publishers who sit in ivory towers and huff at the fact that the unwashed masses don't "get it" and pay enough to support them are dinosaurs doomed to extinction. Fact checking is great but many publishers have a poor record of it. Further, should anyone accept anything they read at face value? Whether from the NY Times or Bobsopinions.com? I understand media managers bemoaning the loss of "remember the Maine"-like powers to pre-chew information and tell the public what to think, but this business model is near death. What is killing publishers also is running smack into a medium where there is some measure of the effectiveness of advertising. The truth is companies will pay enormous amounts to publishers who can deliver the audiences they need. I know of a site that is dedicated to a very small hobby. It is run part time by one person and is mostly user-generated content. The site looks like it was designed circa 1995 and yet it generates over $100,000 in advertising revenue, mostly from tiny companies. But it delivers them their target customer. Based on traffic, operating costs, etc this is a level of advertising revenue that would make a mainstream publisher go into fits of rapture. The recipe for successful publishing going forward is accountability of costs, creativity in content and delivery, and accountability in advertising results. The future is not based on scolding the public with an argument they have already rejected - that our news coverage is so good they will realize their error sooner or later and embrace our clever ways of charging them to read an article similar to ten they can read for free elsewhere. I want information when I want it - not someone telling me what to think about it (whether that someone is a right winger or left winger). And McCarthy and Watergate took place well before the age of the Internet but I find it rather hard to believe that today's massive proliferation of information gathering and reporting makes it more and not less likely that such stories will come out. It will be harder for things to be covered up - and once out these stories will be subjected to numerous versions and points of view. I just feel that too many media types are on the deck insisting that the iceberg didn't make that big of a hole and we can plug it up. Which is too bad because it they could look forward rather than back I think they would see a bright but very different future.

I like the idea I saw recently that suggests all print media shut down their Web sites for a week so that all their free content is not available to bloggers, search engines, etc. Then, it will be most apparent where the news comes from. The new model for print media's online efforts will be either paid content or having visitors register to read content. The trend is just beginning and will gather momentum fairly quickly. Selling impressions or unique visitors is going out of favor, primarily because there is so much non-relevant traffic on so many sites. Web advertisers want to know that site traffic is the right kind of traffic, which requires registration of visitors.

Print media SHOULD shut down web ops for a week... that's the only way they'll ever get their heads out of this cloud of self importance they're lost in. By the end of that week they'll realize that news happens without them - it will find it's way to the public without a reporter anywhere in sight.

Michael Turros's comments capture the core nugget of the free content issue, "Journalism isn't endangered - business models that hinge on the scarcity of journalistic output are". This morning I read a summary of the major newspapers in Slate. In Google Reader I scanned headlines from multiple sources linking to stories I found interesting (I read that there was a major snow storm and power outages in Maine but I knew that already from my niece's Facebook post). I opened a separate RSS newsfeed that I keep for blog subscriptions (there was an interesting story about a company in Israel that has just created a Digg-like aggregator site for blogs). And I checked Twitter to find any interesting tidbits from those I follow and TwitScoop to see the main Twittersphere conversation threads(stocks were up). For perspective, I'm a Baby Boomer. I'm not an early adopter. I don't have an iPhone. And I don't pretend to have the answer. When I read Brill's micropayment proposal, it made sense until I asked the question, "Would I pay?" What I clearly understand is that Michael Turro frames the issue correctly. It's about the business model. But it's looking at business models from a broader perspective not from the traditional print channel perspective with all the ingrained faulty assumptions that Mr. Turro points out. The answer will evolve from this new landscape which has as many unanswered questions as the traditional channels. Twitter is growing exponentially but has no revenue, how will it make money? Facebook has 175 million users but is under-monetized, what happens next? What about emerging services like Qik.com that allow live video broadcast from mobile devices? And in a strange twist these new media companies seem to take some perverse delight in not having a clearly defined revenue model. Presently I get more free content than ever and it comes through a wide range of channels and formats. I'm slowly learning to use tools that allow me to filter and distill that information. I could not have imagined any of this years ago when the Boston Globe landed daily at my family's front door. The confluence of technology disruption and a tough economy will continue to cause a traditional media shake-out. Will a pure free content business model emerge? Probably not. But whatever emerges will be defined mainly by the users/ consumers/readers and the new companies emerging around them and not from places like the New York Times' boardroom.

These are rich and compelling comments, Tony, and you're touching a nerve that's pretty raw right now for a lot of different people. The big question everyone gets hung up on is whether or not they would pay for consuming bits of contents, rather than a pre-packaged whole. One thing I keep thinking about is that from the consumers' perspective they are paying: they pay for the broadband connection, they pay for the computer or cell phone, they pay for the printer. To some degree the content they consumer is a by-product of their personal infrastructure investment, whether its cable, broadcast TV, radio or internet. The consumer isn't concerned about the ultimate business model, beyond a implicit agreement that they will tolerate ads in order to consumer information, and that they will make additional payments for content that they personally value enough to pay for. News is no longer that kind of content, and in rare cases analysis is that kind of content. So, the challenge for newspapers particularly is how to migrate a cost structure that was developed around consumer's direct investment in their content (payment for a paper) to consumer's direct investment in infrastructure to get the content. Here's what changed from the consumers perspective: they bought the printing press and put it in their hands.

Part of the problem with "Free Content" sites is that most of them fail to implement any kind of circulation conversion architecture. They make the content available for free without attempting to qualify and identify the reader. They are then surprised and confused when the advertiser does not get the results they want on ads. Sites that take a controlled circulation approach by making the totally free reader work a bit to get at the content and then make it easy to get when the reader registers are making better headway. There is a basic contract, tell me who you are so I can qualify you to my advertiser. If you do not fit the profile, you must pay. Newspapers are in trouble because they have become too dependent on commodity news. Everyone is printing stories from the same source. There is not much investment in original content. Magazines that produce quality original editorial and implementing conversion architecture on their sites are building valuable circulations of web and e-newsletter readers. Their CPMs for digital are far higher than the commodity news sites.

Content has been free since the inception of journalism, whether in the form of the penny press, controlled-circulation magazines or even glossy consumer mags pumping out copies to elevate circ. The issue, as some above note, concerns the value of the content. Now that the means of production are available to all rather than an elite few, media will find it increasingly difficult to get away with issuing the crap many have gotten away with for years. We're still at the very beginning of this media transformation. And, for the most value for the most people, it's a great thing. But it will continue to sort itself out as it matures. Eventually, audiences will turn to content that offers the most value. In turn, sponsors will follow. As a final thought, throughout the history of our craft, new media has not replaced but repositioned existing media. Print will live on as have radio, television and even soap-box preaching. As for-profit businesses, publishers must get past the stage of mindlessly jumping on fad beliefs such as the exclusionary primacy of digital content and discover and begin to exploit the Platonic ideal state of available media mix.

Fascinating response to this post at http://www.magazinecircus.com/counterpoint-to-folio-is-free-content-a-su... at www.MagazineCircus.com

The problem I have with all these (to use a old newspaper term) thumbsucker pieces is that all the perspective seems to come from the last link in the chain, as in subscribers and newsstand buyers. Even in buying that paper off the stand or getting it on the doorstep, the consumer is getting a heavily subsidized product; just take a look at the NYT Corp., and you'll find that advertising provides a full two-thirds of the revenue. Circulation revenue has been, for many years, a very nice legacy stream of cash, but newspapers can't survive at all without advertising revenue, which is disappearing at a clip of 20%-25%. It's also not all due to Craigslist; in that model of stealing three-line agate back in the classifieds, PennyPower shoppers would've killed dailies a long time ago. This is a problem of major advertisers cutting back ad buys everywhere, and deserting newspapers because nobody's selling them adequately on the value. And the same thing is happening on the Web. Online ads are being cheapened by the pennies-per-click model; did anyone ever sell print display ads with a rate sheet based on the number of consumer phone calls the ad generated? People may not pay for content on the Web; advertisers, however, need to pay a premium rate for sites that attract premium readers. Unfortunately, this train may already have left the station, but there may still be time.

I suggest the democratization of news and driving down of the costs of creating content will have not produce only beneficial effects and does not equal better journalism. Beware unforeseen consequences. (And by the way, great journalism is vital to the health off a democracy.) I don't care how good a blogger is, or how good his or her sources are or how many of them are out there. They can’t replace organizations dedicated to journalism and people trained to do it. And those organizations need some way to make money. Hey, I'm not defending the dinosaurs. I'm supporting creative destruction. But even new-model companies need to generate revenue. Also: Newspaper companies are still where most of the original journalism exists, online or off. I like what Dan writes above. Maybe media companies need to somehow take a piece of the consumer's online access charge.

Would recommend Michael Kinsley’s Feb. 9 op-ed the NYT “You Can’t Sell News by the Slice.” Many local newspapers, and television stations for that matter have had virtual monopolies for decades. The web is subjecting these companies to tremendous competitive pressures as information is hyper-commoditized. There is no way around the fact that the existing costs structures of many of these enterprises just won’t hold up. Many of us in the media biz know we must reinvent to survive. As Marshall McLuhan and Neil Postman pointed out years back technology shapes both the character of a society’s information and the nature of that society itself. Interesting times ahead.